Another Medical Marijuana State Looks to Start Cannabis Dispensary Program

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Delaware could become the third state with existing medical marijuana laws to pave the way for regulated dispensaries this summer.

On Thursday, Delaware Gov. Jack Markell said he will revive efforts to set up a system to distribute medical cannabis via a pilot program that calls for a single “compassion center” that would both grow and sell medical cannabis to patients. Under the proposed timeline, the dispensary could open as soon as next summer.

Delaware legalized MMJ back in 2011, but the governor nixed the dispensary program the following year over concerns of a federal crackdown. Locals cannot grow their own cannabis under the law, creating a situation in which patients can use marijuana for medical reasons but have no legal way to obtain it.

The overall business implications of the governor’s plan are obviously extremely limited. The winning applicant chosen to operate the dispensary and grow site will certainly benefit from having a monopoly (and the associated pricing power) on the entire state’s medical marijuana market, which could hit an estimated $2 million to $4 million annually at the outset.

But there won’t be many opportunities for other entrepreneurs to get involved. Delaware’s medical marijuana law calls for up to three dispensaries, so Markell’s push for just one now is bittersweet.

Still, the development is significant for the industry from a national perspective.

“Any time you can establish a well-regulated and responsible medical marijuana provider, the industry benefits,” said Robert Capecchi, deputy director of state policies for the Marijuana Policy Project, a nonprofit lobbying group that helped pass and implement Delaware’s MMJ legislation. “The simple existence of a well-regulated and responsibly run medical marijuana compassion center will demonstrate to lawmakers that we can allow for limited use of marijuana and at the same time take greater control over to whom marijuana is sold than we currently have, which tends to make people more open to reform.”

It also would represent a symbolic win for the industry and further fuel MMJ’s recent momentum.

If Markell is successful, Delaware will follow in the footsteps of Nevada and Oregon, two other states that approved the use of medical cannabis years ago but only passed legislation to authorize dispensaries this summer.

Additionally, dispensaries have finally opened in several other MMJ states over the past year – including Arizona, New Jersey, Rhode Island and Vermont, as well as Washington DC – after numerous delays. Currently, 12 states plus Washington DC are home to operating dispensaries (though in some areas they are not regulated).

A handful of other states that recently legalized medical cannabis, including Connecticut, Illinois, Massachusetts and New Hampshire, are currently developing regulations and could see their first dispensaries next year. These new markets could top $100 million in cannabis sales annually, according to MMJ Business Daily’s estimates.